Insights 
VT 
Key Points
- The U.S. Dollar Index (USDX) climbed as high as 100.396 before consolidating around 100.186.
- A federal court blocked Trump’s proposed “Liberation Day” tariffs, spurring a broad risk rally.
The U.S. Dollar Index advanced on Thursday, breaking above the key 100.00 threshold as traders reacted to news that a federal court had blocked President Trump’s sweeping new import tariffs. The ruling prompted a rally across equity futures and a rotation out of traditional safe-haven assets, including the Japanese yen and Swiss franc.
The dollar’s gains came alongside a 1.5% jump in S&P 500 futures, reflecting a clear “risk-on” pivot. Investors rotated out of defensive positions as the threat of immediate tariff enforcement was removed, if only temporarily. U.S. Treasury yields also climbed, with the 10-year yield rising 4.4 basis points to 4.52%, and the 2-year yield jumping 6 bps to 4.05%. These moves further bolstered dollar demand as capital flowed into higher-yielding U.S. assets.
Meanwhile, the Trump administration filed a notice of appeal against the ruling, and analysts now expect the case to move quickly through the legal system, possibly reaching the Supreme Court. This looming uncertainty has not yet been fully priced in, leaving open the risk of a reversal should the appeal succeed.
The ruling also introduces fresh questions about U.S. fiscal sustainability. Without the projected tariff revenues, budget pressure could intensify, especially with Trump’s tax-cut-and-spend package already projected to add $3.8 trillion to the national debt over the next decade. Traders are wary that such fiscal strain could begin to weigh on longer-dated Treasuries — and by extension, the dollar — if inflationary concerns resurface.
Technical Analysis
The US Dollar Index (USDX) rebounded from the 96.844 base on 28 May, with prices steadily trending upward to test 100.396 before consolidating. The uptrend was supported by the 30-period moving average, which held as dynamic support through much of the session. After peaking, USDX entered a narrow consolidation range just above 100.00, with slight pullbacks capped by the rising 30-MA.
Picture: USDX tests 100.40 peak after steady rally from 96.84; bullish momentum cooling but trend support holds, as seen on the VT Markets app
MACD momentum surged with a bullish crossover during the breakout, although the histogram is now flattening, suggesting fading momentum in the near term. With price still above the short-term MAs and holding above the 100 psychological level, the bulls may yet attempt another leg higher—especially if 100.40 is cleared convincingly.
Despite the dollar’s rally, caution remains. The Trump administration has already filed an appeal, setting the stage for a prolonged legal process. Traders are watching closely for whether the Supreme Court will weigh in — a move that could inject volatility back into both currency and bond markets.
